The Federal Trade Commission on Tuesday accused T-Mobile USA with bilking customers out of hundreds of millions of dollars with bogus SMS charges.

The FTC claims T-Mobile received 35% to 40% of the total amount third-party scammers charged to consumers for content like celebrity gossip, flirting tips and horoscopes that cost $9.99 a month typically. In some cases, T-Mobile continued to charge customers for the services after becoming aware that they were fraudulent and offered by scammers.

The Federal Communications Commission also said it was investigating complaints against T-Mobile. “Consumers should not be charged for services that they did not order,” said Travis LeBlanc, acting chief the FCC’s Enforcement Bureau, in a statement. “We will coordinate our investigation with the FTC, and use our independent enforcement authority to ensure a thorough, swift, and just resolution of the numerous complaints against T-Mobile.”

In a statement, T-Mobile CEO John Legere, disputed the charge: "We have seen the complaint filed today by the FTC and find it to be unfounded and without merit," he said. "In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want."

"It's wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent," said FTC Chairwoman Edith Ramirez in a statement. "The FTC's goal is to ensure that T-Mobile repays all its customers for these crammed charges."

The extra charges were made possible by third-party billing, in which a carrier places a third party's services on a customer's bill and then gets a cut of the subscription. The practice is known as "cramming."

The agency states that it believes that T-Mobile should have been aware of the issue since so many users complained. The complaints started around early 2012. The FTC's complaint argues that T-Mobile made it difficult for consumers to realize they were being charged extra since the third-party services were listed under the heading "Premium Charges" and a sub-head, "Use Charges." Neither displayed the third-party fees.

The full version of Legere's statement is below:

We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want. T-Mobile is fighting harder than any of the carriers to change the way the wireless industry operates and we are disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors.

As the Un-carrier, we believe that customers should only pay for what they want and what they sign up for. We exited this business late last year, and announced an aggressive program to take care of customers and we are disappointed that the FTC has instead chosen to file this sensationalized legal action. We are the first to take action for the consumer and I am calling for the entire industry to do the same.

This is about doing what is right for consumers and we put in place procedures to protect our customers from unauthorized charges. Unfortunately, not all of these third party providers acted responsibly—an issue the entire industry faced. We believe those providers should be held accountable, and the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded, but also misdirected.

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